MCQ for CA Foundation Accounting Chapter 4 INVENTORIES

Sample Multiple Choice Questions (MCQ's) for CA Foundation - Paper 1 - Principal and Practice of Accounting - Chapter 4 INVENTORIES - For Practice relevant for Dec 22 and May/June 23 Examinations

Q:1  The amount of purchase if 

Cost of goods sold is Rs 80,700 

Opening Inventory Rs 5,800 

Closing Inventory Rs 6,000

  1. Rs 80,500
  2. Rs 74,900
  3. Rs 80,900

Answer: 3

Q:2  Average Inventory = Rs 12,000. Closing Inventory is Rs 3,000 more than opening Inventory. The value of closing Inventory = ______.

  1. Rs 12,000
  2. Rs 24,000
  3. Rs 13,500.

Answer: 3

Q:3  While finalizing the current year’s profit, the company realized that there was an error in the valuation of closing Inventory of the previous year. In the previous year, closing Inventory was valued more by Rs 50,000. As a result

  1. Previous year’s profit is overstated and current year’s profit is also overstated
  2. Previous year’s profit is overstated and current year’s profit is understated
  3. Previous year’s profit is understated and current year’s profit is also understated

Answer: 2

Q:4 Consider the following for Q Co. for the year 2019-20: Cost of goods available for sale Rs 1,00,000 Total sales Rs 80,000 Opening inventory of goods Rs 20,000 Gross profit margin on sales 25% Closing inventory of goods for the year 2019-20 as

  1. Rs 80,000
  2. Rs 60,000
  3. Rs 40,000

Answer: 3

Q:5  If the profit is 25% of the cost price then it is

  1. 25% of the sales price
  2. 33% of the sales price
  3. 20% of the sales price

Answer: 3

Q:6 Goods purchased Rs 1,00,000. Sales Rs 90,000. Margin 20% on cost. Closing Inventory = ?

  1. Rs 20,000
  2. Rs 10,000
  3. Rs 25,000

Answer: 3

Q:7 A company is following weighted average cost method for valuing its inventory. The details of its purchase and issue of raw-materials during the week are as follows: 

1.12.2020 opening Inventory 50 units value Rs 2,200. 

2.12.2020 purchased 100 units @ Rs47. 

3.12.2020 issued 50 units. 

4.12.2020 purchased 200 units @ Rs 48. 

The value of inventory at the end of the week and the unit weighted average costs is

  1. Rs 14,200 – Rs 47.33
  2. Rs 14,300 – Rs 47.67
  3. Rs 14,000 – Rs 46.66

    Answer: 1

    Q:8 The cost of sales is equal to

    1. Opening stock plus purchases
    2. Purchases minus Closing stock
    3. Opening stock plus purchases minus closing stock

    Answer: 3

    Q:9 Inventory is disclosed in financial statements under:

    1. Fixed Assets
    2. Current Assets
    3. Current Liabilities

    Answer: 2

     

     

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